U.S. Supreme Court's class-action ruling leaves unanswered questions

By Kimberly Atkins

Dolan Media Newswires

It was a closely watched case that came to a dramatic and unexpected conclusion of questionable precedential value. Now attorneys are left pondering what effect, if any, the U.S. Supreme Court's decision in Comcast Corp. v. Behrend will have on class-action certifications.

Lawyers on both sides of the class-action bar were braced for the justices to decide whether evidence presented by plaintiffs at the certification stage has to meet the same heightened standard for admitting expert testimony at trial established in the 1993 case Daubert v. Merrell Dow Pharmaceuticals, Inc. (509 U.S. 579). In Daubert, the justices held that expert evidence can be admitted at trial only if the expert testifies regarding technical, scientific or other specialized knowledge that has a valid scientific connection to the case and will assist the trier of fact.

A ruling in the affirmative would have dealt yet another judicial blow to class-action cases, which have been hit hard in recent years, potentially making it significantly more difficult for plaintiffs to make it past the certification stage. A ruling to the contrary, defense attorneys maintained, would have gone against the principle stated in the court's 2011 ruling in Wal-Mart Stores v. Dukes, which requires putative class members to assert a common contention capable of class-wide resolution.

But the court chose instead to issue a limited ruling in favor of the defendant and holding that the plaintiffs' antitrust class action could not be certified based on the evidence presented.

"It's not a big step," said Jonathan F. Cohn of Sidley Austin in Washington, who authored an amicus brief in the case on behalf of the Chicago-based defense attorney advocacy group DRI.

Strange trip through the Supreme Court

The case proved to be atypical from the moment certiorari was granted.

It stemmed from a class action brought by subscribers against the cable company Comcast alleging illegal price-fixing practices. The company appealed the district court's certification of the class, arguing that the evidence presented by the putative class members did not adequately prove the commonality required for class actions. But the 3rd U.S. Circuit Court of Appeals disagreed, ruling that the court was not required to dive into merits arguments at the certification stage.

Comcast asked the justices to rule on whether a class action can be certified "without resolving 'merits arguments' that bear on Federal Rule of Civil Procedure 23's prerequisites for certification, including whether purportedly common issues predominate over individual ones."

The court granted certiorari, but gave the parties a new question to argue: whether class members must introduce admissible evidence, including expert testimony, to show that the case is susceptible to awarding damages on a class-wide basis.

That reformulated question signaled to mass tort lawyers that the justices were eager to resolve the Daubert issue. But in the end, the court's majority punted, rendering a fact-specific ruling that largely reaffirmed the principles established in Dukes.

Declining to announce a new standard, the court simply stated that its analysis of the evidence was conducted "under the proper standard for evaluating certification."

"By refusing to entertain arguments against respondents' damages model that bore on the propriety of class certification, simply because those arguments would also be pertinent to the merits determination, the Court of Appeals ran afoul of our precedents requiring precisely that inquiry," Justice Antonin G. Scalia wrote for the 5-4 court.

In fact, Scalia only mentioned Daubert in a footnote, citing it as authority on whether the issue had been properly preserved, and leaving the issue of whether the Daubert standard applies at the certification stage for another day and another case.

The ruling drew a dissent from Justices Ruth Bader Ginsburg and Stephen G. Breyer, who took the highly unusual step of jointly announcing their dissent from the bench before a courtroom packed with people waiting to hear oral arguments in the challenge to the federal Defense of Marriage Act.

Ginsburg expressed disapproval that the case was taken up at all, criticizing from the bench the fact that "the court wrote its own question presented" to consider an issue "that was not properly preserved."

Breyer condemned the merits of the majority's ruling for failing to even address the new question presented fashioned by the court.

"When we ignore our normal procedures and practices, we risk going terribly wrong," Breyer told spectators at the court last week.

Mixed-bag ruling

Whether the ruling will have a negative precedential effect on class-action plaintiffs remains a largely open question. Consumer advocates and plaintiffs' attorneys say that the decision, coupled with other recent rulings in cases like Dukes and AT&T Mobility LLC v. Concepcion, essentially closes the courthouse doors to class plaintiffs by imposing high hurdles to certification and giving corporations the leverage to force claimants to litigate their claims individually--something many plaintiffs can't afford to do.

But defense attorneys said the ruling simply reaffirms the principles of Dukes, and underscores the point that certifying a class requires good evidence.

"The ruling ensures that the class-action analysis is a rigorous analysis that may overlap with the merits of the case," Cohn said.

Barry C. Barnett, a partner in the Dallas office of Susman Godfrey who argued the case on the plaintiffs' behalf, said that the vigorous argument against the application of Daubert at the certification stage paid off, since the court declined to go down that road.

"I thought we won that point by a pretty clear margin" after oral arguments, Barnett said.

Entire contents copyrighted © 2013 by The Dolan Company.

Published: Thu, Apr 18, 2013


  1. No comments
Sign in to post a comment »